Paper Sues American Continental in Bid for Controversial Tape

A Phoenix newspaper filed suit against American Continental Corp. Tuesday, seeking the return of a reporter’s tape-recorded interviews, which American claims show that federal regulators have illegally leaked confidential information about the company’s Lincoln Savings & Loan subsidiary.

Phoenix Gazette reporter Leslie Irwin inadvertently left the 90-minute tape cassette in the office of Tempe developer Conley Wolfswinkel after interviewing him about his loans and financial dealings with Irvine-based Lincoln.

The suit claims that Wolfswinkel and others are wrongly keeping the paper from recovering its property.

Wolfswinkel, who said Irwin left the cassette in a recorder that she had borrowed from him, said he listened to the tape after the June 2 interview with Irwin and then gave it to his lawyer and to an attorney for American Continental, which is based in Phoenix.

American Continental executives claim the tape is evidence that federal regulators have been illegally leaking financial information about Irvine-based Lincoln to the media. Federal law prohibits government agents from disclosing such confidential information.

But Charles H. Keating Jr., chairman of American Continental, claims that S&L; regulators have been leaking restricted information to reporters for more than three years in an effort to destroy him and the company. Keating and regulators have feuded almost since the time his firm bought Irvine-based Lincoln in 1984.

American Continental filed for bankruptcy protection April 13 while it tries to reorganize its debts under Chapter 11 of federal bankruptcy laws. Regulators seized Lincoln the next day and now operate it under a conservatorship.

In addition to the Gazette’s civil lawsuit, Irwin and a Gazette editor filed a criminal theft report Monday with the Tempe Police Department.

A. Melvin McDonald, an American Continental attorney, said he has sent a copy of the tape to the U.S. Department of Justice’s Public Integrity Section and has given the original to the FBI office in Phoenix. The Justice Department, he said, has opened an investigation of alleged criminal leaks of information by government agents.

The tape reveals that regulators gave Irwin confidential information about Wolfswinkel’s loans and other financial dealings with Lincoln and American Continental, said Tarlow and Howard L. Weitzman of Los Angeles, another lawyer for American Continental.

“They told her things like how much Conley owes, what his loans were for and other intricate details,” Tarlow said. “They’re not supposed to be giving that information to reporters or anybody.”

Weitzman said Irwin taped one regulator saying that “Keating is a target and we’ll keep looking for something until we get him.”

Pamela Johnson, Gazette managing editor, could not be reached Tuesday and a Gazette spokeswoman referred further questions to the newspaper’s attorney, James Henderson, who declined comment.

A spokeswoman for the Federal Home Loan Bank of San Francisco said officials there “already are trying to learn the facts behind the latest claim that this bank has released confidential information.”

Free-lance writer Steve Webb in Phoenix contributed to this report.